Hedge Fund D1’s SpaceX Bet Fuels Its 39% Private Book Gain

D1 Capital Partners’ portfolio of private investments climbed 39% last year — powered by a bet on Elon Musk’s SpaceX, which nabbed an $800 billion valuation last month.

The rocket and satellite maker makes up roughly 45% of the hedge fund’s venture capital and private equity exposure, according to people familiar with the matter. Without that investment, D1’s privates book would have advanced about 18%, the people said, asking not to be identified because the information isn’t public.

SpaceX’s latest valuation reflects its “transformational progress,” D1 founder Dan Sundheim wrote in a letter sent to investors Friday. If Musk’s firm succeeds, “we believe it can be the largest driver of value creation for the company,” he added.

The investor letter offers insight into how D1’s biggest wagers have fared since 2022, when the firm was stung by declining venture valuations and plunging technology stocks. The fund tumbled 30.5% that year, and markdowns have since weighed on returns.

D1’s private returns for 2025 also got a boost from its investment in Ramp, a corporate spending management platform that reached a $32 billion valuation last year.

The public book returned 32.3%, a blended figure across all share classes. Meanwhile, the stock portfolio of D1’s biggest sleeve, Share Class C, which invests 35% in privates, surged 33.7%. The gains stemmed from several successful long bets, including on Siemens Energy AG, Hanwha Aerospace Co., Rolls-Royce Holdings Plc and AppLovin Corp., according to the letter.

D1’s assets rose to $31.1 billion as of Dec. 31, with roughly two-thirds in private wagers and the rest in stocks.

The firm is raising its first dedicated private equity fund and has gathered $1.5 billion in commitments, mostly from existing clients, topping initial targets, according to the letter. It expects a final close this year. D1 is also considering launching a long-only strategy.

A representative for the New York-based firm declined to comment.

The hedge fund marked up 23 late-stage growth companies, with the bulk of the increased valuations coming from SpaceX, Ramp, ChatGPT creator OpenAI, software firm DriveNets and artificial-intelligence startup Anthropic, according to the letter.

D1 marked down 26 firms, including fantasy sports platform Dream11, baby nutrition firm ByHeart, used-car platform Kavak, and account engagement company 6sense.

The biggest hit to the private book came from Lineage Inc., a cold-storage real estate investment trust whose shares tumbled after it went public in 2024.

D1’s biggest private positions after SpaceX are Ramp, which makes up 7% of the portfolio, and Collectors Universe and ride-hailing firm Bolt, which each account for 4%, the people said.

While D1 reported the performance of its public and private portfolios, individual clients’ returns may differ because of varying exposure to private bets — with some having access to certain venture opportunities depending on when they invested.

‘Critical Frontier’

D1 first invested in SpaceX in early 2020 when it was valued at $36 billion, and Sundheim’s letter cites four areas where the firm anticipates even more growth. Those include SpaceX’s core Starlink business, which provides satellite internet service, and major inroads it has made in its direct-to-cell service that aims to provide off-the-grid connectivity.

SpaceX is also becoming a more strategically crucial defense business as space emerges as a “critical frontier” for warfare, Sundheim wrote. And Musk’s firm is “well positioned to build data centers in space,” he added.

Sundheim said D1 remains “very excited” about SpaceX, which is targeting a $1.5 trillion initial public offering this year.